IV. Segment reporting

The Management Board, as the chief operating decision maker, assesses opportunities and risks and allocates the operating segments’ resources. The segmentation as well as the selection of the indicators presented is realized in accordance with the internal control and reporting systems (the “management approach”). The segment information is prepared applying the same accounting standards as described in the notes to the consolidated financial statements.

Based on monitoring and control by the Management Board, three operating segments were identified, for which no further aggregation is possible due to their differing product and service orientation. Compared with the consolidated financial statements as of 30 September 2023, no changes have occurred in relation to segment reporting.

BRAIN’s business activities are categorized into the BioProducts, BioScience, and BioIncubator operating segments. Segmentation is according to the criterion of the existence of an industrial scale of products. At Management Board level, the individual segments’ business performance is measured on the basis of revenue, and their profitability is measured based on adjusted EBITDA. The Management Board performs and approves planning at this level. All three operating segments have a different strategic orientation and require different marketing and business development strategies.

The BioProducts segment mainly consists of its industrially scalable products business focusing on specialized enzymes and proteins.

The BioScience segment mainly includes research and development business with industrial partners, and the company’s own research and development. Marketing the company’s own products and developments with external partners also forms part of this operating segment.

The BioIncubator segment mainly comprises the R&D pipeline as well as the company’s own R&D projects or those initiated with partners offering high value-creation potential. One particularly promising incubator project concerns the development of a proprietary CRISPR-based gene editing technology platform. All applications outside the therapeutic area are developed and expanded within BRAIN Biotech. Pharmaceutical applications will be further developed under license by the independent company Akribion Therapeutics GmbH in the next financial year.

The BRAIN Biotech “Holding” segment mainly comprises personnel expenses and other expenses for Group administration, further development of the BRAIN Biotech Group, stock exchange listing, and M&A activities.

The allocation of adjustments (see the section “Adjustments to earnings”) to the segments is generally made in the segment in which the costs to be adjusted were incurred.

Sales revenues generated between the segments are realized on standard market terms.

The following overview presents the segment results.

^{1 Research and development grant revenue}

^{2 Changes in inventories of finished goods and in work in progress}

Revenue derived from the following revenue sources:

The following table presents revenue by geographic region:

Revenue is allocated to countries according to the destination of the products or services. Revenue in other countries was not material in comparison to total revenue and for this reason such revenue is not shown separately.

The following table shows intangible assets and property, plant and equipment by geographic region, according to the respective Group companies’ locations. If assets in an individual foreign country are material, they are disclosed separately:

No relationships exist with individual customers where revenue is to be categorized as significant in comparison with consolidated revenue.